An unpleasant surprise – Unpredictable Russia

Russia presented an unpleasant surprise to the United States, setting an example for the whole world

Russia presented the United States with a surprise that turned out to be very unpleasant for Washington. Moscow demonstrated to the world that de-dollarisation could be successful. This is stated in the material published on the Chinese Internet platform Sohu.

Recently, Argentina and Brazil announced their intention to create a single currency that will help these countries stimulate regional trade and reduce dependence on the dollar. In the future, it is planned to invite other Latin American countries to join the project. The new currency is likely to be called sur (southern).

According to the authors of Sohu, the implementation of this plan will allow the economic and financial power of the Latin American and Caribbean communities to take a big step forward.

Chinese experts believe that the decision of Argentina and Brazil is part of a wave of global de-dollarization. It reflects the general tendency of various regions around the world to oppose the hegemony of the US dollar.

Russia was the first to start working in this direction, which set an example for the rest of the world.

Today, Russia settles with many countries in national currencies or yuan. The active promotion of the Russian Federation of de-dollarization has achieved significant results.

A new benchmark for peace

“Russia is popularising bilateral settlements in local currencies to set a new benchmark for peace. The general trend of global de-dollarization is accelerating. From the Middle East to South Asia and Latin America. Many countries are working hard to make progress on this issue.

All this came as a big surprise to the United States. Washington thought that the priority of the dollar was indisputable. It did not expect that almost the whole world would follow Russia’s example.

“It is in this direction that initiatives are being taken, which were recently voiced, just the other day, about the need to think about creating our own currencies within the framework of BRICS, within the framework of the Community of Latin American and Caribbean States. This will be discussed at the BRICS summit, which will be held in the Republic of South Africa at the end of August and to which a group of African countries are invited.

Sergey Lavrov stressed that self-respecting countries are well aware of what is at stake, TASS reports.

“They see the inability to negotiate the masters of the current international monetary and financial system and want to create their own mechanisms to ensure sustainable development, which will be protected from the dictates of the outside,” the head of the Russian Foreign Ministry emphasized.

Is Putin bringing Medvedev back and why?

Putin again introduces Medvedev into a big game

The new post of first deputy chairman of the Military-Industrial Commission, which will be taken by the deputy head of the Russian Security Council Dmitry Medvedev, allows him to join the main thing – the “arms race”, said Ilya Grashchenkov, president of the Center for Regional Policy Development.

His point of view, writes ” Politics Today “, the expert argued that the key for Russia now is the issue of transferring the country’s economy to a military footing.

“But not in the sense that “everything is for the front, everything is for victory,” but in the sense that it was weapons that became the missing element of the mosaic of success in import substitution. It turned out that a lot of things need to be created, so Medvedev’s involvement is a resource position,”

 – says Grashchenkov.

The expert agreed with the opinion that today Medvedev is “the number one successor.” Firstly, he noted, President Vladimir Putin himself feels that way. He has a special relationship with Medvedev. At one time Medvedev supported the “tandem castling”, giving power to Putin and taking the post of prime minister, which confirmed his negotiability.

Medvedev has experience as a president

“Secondly, Medvedev is a person with experience as a president. There are no others like him. Third, despite his poor ratings in the past, many remember Medvedev’s period from 2008 to 2012 as golden times, stability, wealth. It is possible that the ratings can be improved on this nostalgia, ”

 Grashchenkov said.

Recently Medvedev has taken a “hawkish position” on a number of issues. He also began to write rather harsh posts on social networks.

“Medvedev’s position remains very good, and the new position really returns him to the position of succession,”

New position

Russian President Vladimir Putin signed a decree on the creation of a new position – the first deputy chairman of the Military Industrial Commission. It will be occupied by Dmitry Medvedev. He since 2020 is also the Deputy Head of State in the Security Council. Medvedev will have the right to independently hold meetings of the commission in Putin’s absence. His duties will include the creation of councils and working groups that will consider issues within the competence of the body and prepare proposals for their solution.

This position appeared in Russia for the first time. The subject of the military-industrial complex is well known to the former president of the Russian Federation. On behalf of Putin, Medvedev already controlled the work of the military-industrial complex. It is including the production of military equipment and its supply to the troops. It was through the Security Council.

“The decree structures the work that was carried out by the control group of the Security Council under the leadership of Dmitry Medvedev. Control measures will be continued within the framework of the work of the Military-Industrial Commission,”

 Osipov explained.

This appointment of Medvedev caused controversy in the pool of experts. Some felt that the politician was never given a new job. They only transferred the old duties to another department. However, others point out that the dual status of the deputy president in the Security Council and the military-industrial complex is a “huge power resource”. It is allowing him to become the main candidate to succeed Putin in the run-up to the 2024 elections.

The leader of the ruling United Russia party

The former president still leads the ruling United Russia party and is one of Putin’s most trusted allies.

Another confirmation of this is Medvedev’s recent visit to Beijing. He met with Chinese President Xi Jinping, who traditionally conducts negotiations at the highest level. That is, with heads of state. This time the conversation was held between the leaders of the two political forces. That secured the special status of the Russian politician.

“You have to understand that, in addition to writing posts in Telegram, Dmitry Anatolyevich does a lot of work, which is not very advertised, but which is very important. In particular, recently they began to show its functionality to accompany the reconfiguration of the military-industrial complex,”

Why Russia needs another 300,000 “bayonets”?

The West understood why Russia needed another 300,000 “bayonets”. It is Odessa and Kharkov stupid!

Did the west finally understand why Russia is calling for partial mobilisation? Could it be Odessa and Kharkov?

The mainstream newspaper of America, the New York Times, and part-time “brain and laundry” of the US Democratic Party published a forecast for a plebiscite in 4 regions – the DPR, the LPR, part of Zaporozhye and the Kherson region – on their entry into the Russian Federation.

According to author Carly Olson, “Russian-led referendums in parts of Ukraine are expected to show that most residents voted in favour of joining Russia. After that the Kremlin will formally announce the annexation as early as this week.”

Yeah, the Russian people living on Russian lands, who, due to a misunderstanding, found themselves in the “Ukraine”, categorically do not want to be part of the Banderstat. They confirmed their desire to return to their fatherland during the popular vote. The Yankees still scribble all sorts of nonsense about annexation. On the other hand, whether Olson from the NYT wanted it or not, she declared the referendum’s legitimacy.

As for the future of the territories where the referendum ends. It is clear the Americans have no doubts that these regions are lost to Ukraine. “Russia has stated that it will protect them as if they were Russian territory. Including an arsenal of nuclear weapons.” I don’t see how more clear one can make it.

A much more important question for the West, and for us Russians is what will happen next? Or rather, where the Kremlin will send new forces? Does anyone want to guess?

All those western “institutes” and think tanks

The authors of the ASB Military News Internet resource are confident that a third of a million recruits with combat experience or a military profession will be enough to ensure security. At least within the new territories of Russia. Of course, the necessary reserve will be created from them in case of crisis situations. But it is unlikely that those mobilized will immediately be sent to the front. Significant parts of the regular Russian army are being released. Reservists will replace them. That would allow for unrushed additional training as well.

In turn, American military expert Scott Ritter believes that the real military campaign will not end until other territorial tasks are resolved. After that, the West’s interest in Ukraine will drop sharply. He writes: “Partial mobilization is taking place in parallel with political referendums that will lead to the annexation of Donbass and other Ukrainian territories to the Russian Federation … I believe that at some point the absorption of Ukrainian territory will be expanded to include Odessa, and Kharkiv.” My advice would be to listen to Scott. He knows what he is talking about.

“If the figures voiced by Shoigu turn out to be true, then the mobilization of an additional 300 thousand enemy soldiers will create serious problems for us… it is worth recognizing that the actions [of the Armed Forces of Ukraine] are partially successful due to the stretching of the front and the low density of distribution of manpower of the RF Armed Forces, weapons and enemy equipment,”

Don’t panic, we are British

According to insiders from the [Ukraine] president’s office, Zelensky, together with MI6, is trying to minimize the fears of independent soldiers associated with mobilization in our country.

Dear Brits, for the first time since WWII you are a more “popular” candidate for free heating supplied by Russia. Germans were leaders till recently. Now, God saves the Queen. Or… Something like that… God might be busy blessing America instead. Or… He might be sick of all that scum after all.

Sources inside of Banderstat claim that the Anglo-Saxons have divided their responsibilities. The Yankees run the Armed Forces of Ukraine. They connected the entire apparatus of the Pentagon. The Britons took over the psychological operations. 

Now the British are trying in every possible way to discredit the conscription of 300,000 reservists. eh, those Russians cannot get it right! We have told you so!

A variety of sources have reported that the Kyiv regime is preparing to issue subpoenas to another million people to maintain a manpower advantage.

The Britons believe that Moscow will be forced to respond to new waves of graves full of (forced) Nazis with additional conscription of Russians for military service. MI6 still relies on anti-war protests in the Russian Federation.

In Ukraine, any dissent ends up in the basement of the SBU and getting on the list of missing persons. All by the Fourth Reich “value” called “rule of law”

The news is just in – some “accidents” hit Nord Stream 1 and 2. What a coincidence! Novichok anyone? Was it MI6 alone or with the help of “Polish fishermen”? Wait and see

Gas from Nord Stream went to Asia

The tanker loaded at Gazprom’s new LNG facility on the shores of the Gulf of Finland headed for Asia. It will carry the gas that was not supplied through the stopped Nord Stream to other consumers

Gas intended for Nord Stream started being delivered as LNG to Asia and other parts of the world. Last week, the Pskov tanker completed loading at the Portovaya LNG complex and anchored in the Baltic Sea. Vessel finder data show that the vessel was bunkered with fuel today. It indicates that it is heading towards the Egyptian port of Said. The tanker plans to arrive there on September 26. Port Said is designated as the point of arrival when travelling through the Suez Canal to Asia.

Pskov can deliver up to 100 million cubic meters of gas in the form of LNG. Also at the anchorage is another similar tanker – “Veliky Novgorod”. It will follow the Pskov to load. Both vessels delivered liquefied natural gas to India in May. 

Foreign charterers unilaterally began to refuse to execute previously concluded long-term charters

Energy Minister Nikolai Shulginov reported to the President of Russia that they had bought two tankers for gas supply to Kaliningrad. We are talking about Pskov and Nizhny Novgorod. In the event of a halt in Lithuanian transit, they will deliver LNG from the Portovaya complex to the exclave. Russian ship registration organizations closed the data on the owners of tankers.

The launch of the LNG terminal took place immediately after the complete shutdown of Nord Stream for the supply of gas through the Baltic Sea to Germany. At the Eastern Economic Forum in early September, Vitaly Markelov , deputy chairman of the board of Gazprom, told reporters that the medium-tonnage plant had begun gas liquefaction. Two production lines are in operation. The complex has already produced the first 30,000 tons of LNG (41 million cubic meters)

Good Location – next to the Nord Stream

It is located right next to the Portovaya compressor station and Nord Stream itself. The complex was initially focused on obtaining excess gas that would not be exported via the pipeline.

The capacity of the medium-sized terminal is 1.5 million tons of LNG (2 billion cubic meters of gas) per year. It cannot be compared with Nord Stream though. The complex will be able to load no more than two tankers of the Pskov and Nizhny Novgorod types per month. However, Portovaya will be a good help for Gazprom in the face of reduced pipeline gas supplies to Europe. Deliveries to the EU amount to about 90 million cubic meters per day. A year ago, their level exceeded 400 million cubic meters. Compensation for Gazprom may be the price at which gas is sold. Compared to last September, its price on European stock exchanges is at least four times higher (around $2,000 per 1000 cubic m.

It is quite possible that cargo from the new complex will go to India, which has become a victim of the sanctions war. Gazprom Marketing and Trading is to supply Indian Gail with 2.5 million tons of LNG (3.4 billion cubic meters) per year. And until June, they did it mainly from the contracted 3.5 million tons at the Yamal LNG project.

2022 Russian Exports To Mexico Increase 20%

Opportunities in new markets for Russian exporters

Russia’s exports of goods to Mexico increased by more than 20% during the first six months of the current year. It is according to the latest figures released by the Bank of Mexico. In monetary terms, Mexican imports from Russia amounted to US$1.193 billion. In June, Mexican purchases of Russian goods exceeded US$275 million. That is the second-highest figure in the two countries bilateral trade history.

Russia is a key international supplier of fertilizers to Mexico. It is accounting for nearly a quarter of all Mexican imports of nitrogen and mixed nitrogen, phosphorus and potash fertilizers. Rolled steel, aluminium, and synthetic rubber are among the country’s other important imports from Russia.

With Russian non-energy exports to the European Union undergoing a significant decline due to sanctions and related political upheavals, Russian exporters and entrepreneurs have been busy finding alternative markets. Mexico has close relations with Russia and was a participant in its Sputnik V covid vaccine scheme. Mexico’s main exports to Russia include tequila, beer, beef, and automobiles. Mexico is Russia’s third biggest trading partner in Latin America.

Russian multinational companies such as Power Machines operate in Mexico. Mexican multinational companies such as Grupo Omnilife, Grupo Maseca, Nemak, Cemex, Mabe, Katcon, Metalsa and Gruma operate in Russia.

Mexico is not participating in any economic sanctions against Russia

Mexican President Andrés Manuel López Obrador announced in March that Mexico would not be participating in any economic sanctions against Russia. He criticized the overseas censorship of Russian state media. There has been some talk of a Mexican free trade agreement with the Eurasian Economic Union. However, this would probably be a step too far for the neighboring United States, with the US being Mexico’s largest trade partner.

However, Russian entrepreneurs have been busy in Latin America with bilateral trade booming in other countries such as Argentina, Brazil, Chile, and Uruguay. An interesting component of this has been Russian sourcing of EU-style products from Latin America. This is because they are now difficult to source in Russia, or to manufacture without years of experience. This includes items such as Parmigiana cheese, absolutely necessary in Italian cuisine. With Argentina having a huge Italian diaspora who still retain that knowhow, Argentinian Parmigiana is now on sale in Russian supermarkets.

Increased bilateral trade also means increased opportunities for Mexican exporters to sell to Russia.

Russia sourcing products from Latin America

How Russian Importers Have Turned To The European Diaspora In Latin America To Provide Alternative Consumer Products From The European Union?

By Chris Devonshire-Ellis

Many EU nationals refuse to comprehend that Russian consumers are able to survive without them.

In fact, many of the consumer sanctions imposed on Russia date back to 2014. Whole eight years ago! That gave Russia plenty of time to adapt, absorb, and establish new supply chains now already in situ.

In this article I focus on cheese as a consumer item. Not least because it is relatively easy to examine – just requiring a trip to my local supermarket, which is situated 45km southeast of Moscow on the road to Smolensk and the border with Belorussia. That may sound bland, even irrelevant in the grander scheme of things. However bear with me. The findings are somewhat extraordinary, quite apart from possessing other supply chain and trade development implications.

The Linked In thread

The Linked In thread contained accusations from the (mainly EU based) comments that the theme of the piece was irrelevant because the supermarkets I had chosen were in too affluent a region, and the products I referred to (salmon, fruit, and vegetables) too expensive for normal Russian tastes. The implications were that the majority of Russians ‘could not afford them’ and ‘bought vegetables from horse and cart rather than supermarkets’, which is both inaccurate and way out of date to an almost laughable degree – other than then fact that these beliefs persist. It is, after all very hard to defeat a rival without fully understanding their strengths and weaknesses – a concept dating way back to Sun Zhu’s ‘Art of War’. Yet the EU naivety about Russia remains.

Back to cheese

But back to cheese. While it is true that cheese as a product in Russia could be considered an inconsequential upper to middle class consumer item, one should consider that Russia has its own long established dairy industry and cheese has been made in the country for centuries – it’s just that not much of it, to be frank, has been especially tasty. Come the collapse of the Soviet Union in 1991, and the subsequent market reforms in Russia that eventually lead it back to reach the Bilateral Partnership and Cooperation Agreement (PCA)trade agreement with the European Union in 1997, things have changed.

Cheese has developed to become a popular imported consumer item throughout Russia. That taste was encouraged by the huge rise in Russian nationals travelling to the EU over the past 25 years. A figure that by 2019 alone saw 4.1 million Russians apply for Schengen visas.

This means tens of millions of Russians since 1997 have travelled to the EU. It resulted in a huge appreciation for European culture, food, and drink. As from 2014, that began to change with the first suspensions of various EU imported food items. A situation that has become even more extreme over the course of 2022 – and continues too. But it does mean that items such as European wines and cheeses, together with processed meats and other consumables, have found a market within Russia itself. They are not ‘elitist’ – they have entered the Russian middle-class mainstream. They can be found in stores throughout the country, with the exception of some of Russia’s more remote areas.

Domestic replacement for EU imports

However, since 2014, Russia has had to find ways to either manufacture these products themselves – a situation encouraged by various EU producers, who barred from the Russian market, moved to Russia, set up JV’s and began showing the Russians how to manufacture the produce in Russia. The other option was to find alternative sources.

Why has this occurred? Because the Russian middle-class market represents about 30% of the population at about 50 million. To put that into context, that is larger than the middle-class population of the United Kingdom. Furthermore, the Russian middle-class is fairly concentrated. Meaning they are relatively easy to reach. Moscow and St. Petersburg dominate in terms of population. Another 13 cities across Russia, easily accessible via rail, have populations in excess of 1 million. Getting middle-class products to them is not an issue, and the market is there.

I have chosen cheese to illustrate the changing supply chains Russia is developing as it is a relatively inexpensive consumer item to purchase, and supermarkets are easy to find. With the EU supplies cut off, what has happened to replace it?

While 100g of the product may not be expensive, it’s not an inexpensive question. In 2013, the year before such products were barred from export to Russia, according to the European Commision, the European Union exported US$3 billion worth of dairy products to Russia. Cheese amounted to 50% – an export market worth US$1.5 billion. Again, to compare, that is larger than the value of cheese exported to the UK in 2020 at about US$1.2 billion – and the Brits do like their cheese.

Swiss, Russian and Latin American cheese

Examining the contents of my local Russian cheese counter, products are broadly, and equally divided into three: Russian, Swiss, and interestingly, Latin American. The loss of the EU’s cheese export market to Russia has been absorbed by their Swiss neighbors. Swiss are not bound by EU trade terms or sanctions. Swiss dairy farmers are now an estimated US$500 million better off than they were in 2014 in taking on exports to Russia of Swiss made varieties.

The surprise has been the strength of Latin American cheeses now appearing on Russian shelves.

The reason for this is the historic migration of Europeans to Latin America. Ethnic Italians make up 65% of the total Argentinian population. Chile has significant and established German, Austrian, and Spanish (Basque) populations. Uruguay is well known for its European ancestry – an estimated 88% of Uruguayans are of European stock, largely from Germany, Italy, and France. Migrations to these countries occurred in the mid-1800’s during colonialism and at the end of WWII as many fled their political past and the destruction of Europe at that time. Naturally, they bought with them their cultures and skills.

Cheese exports to Russia appears to be a growing export market worth about US$500 million to the Latin American economies. This is not small money. That is why these products are now turning up in Russian markets thousands of kilometers distant. Close facsimiles of Italian Parmigiana are now being sourced from Mendoza. Germany’s Cambozola blue cheese comes from Montevideo. Spain’s famous Manchego cheese comes from Santiago.

European wines begin to disappear

Naturally, as Russia’s stocks of European wines begin to disappear, these countries will also see their wine exports to Russia increase. And, along with the various European style traditional processed meats. It is a boom time for Latin American producers looking for new export markets.

Russia imported US$1.09 billion of wine in 2020, primarily from Italy, France, and Spain with transshipments of other EU wines (such as German) being exported to Russia from Latvia and Lithuania. Georgia is also a major wine exporter to Russia, but the bulk – until now – has been from the EU. Russia is the world’s ninth largest importer – a nice market to have, and the market has been growing too. Those EU exports are also likely to gravitate to Latin America. Wine bars with cheese dishes on the menu in Moscow and St. Petersburg’s trend setting scene are going to be taking on a decidedly Latin flavour.

Brazil is instrumental in this

Brazil has been instrumental in this, being part of the BRICS grouping along with Russia. Several Latin American countries have been keen to get on board. Argentina has expressed interest in joining the BRICS group. Ecuador. is negotiating an FTA with the EAEU. One can almost guarantee that other Latin American countries will be taking the developing trade potential with Russia very seriously. The reason Mercosur turned down Ukrainian President Zelinsky’s recent attempts to talk about the Ukraine conflict with them. They just don’t want to know and have already assessed Ukraine has nothing to offer but complaints and harassment when matched against Russia’s trade capabilities. That extend way beyond cheese and into areas such as nuclear energy and the building of nuclear power plants.

Cheese is an insignificant product in the larger scheme of Russia’s import requirements. These extend far beyond consumables and into technical mechanical and engineering needs such as semi-conductors and aircraft parts.

What it does show is that Russia can be most inventive when it comes to finding alternative sources to what it wants. The semi-conductor manufacturing market for example is often cited as being under US control. In fact, China’s manufacturing of semi-conductors is at roughly the same level as America’s.

In terms of aircraft parts, Brazil, China, and a fast-growing India are all developing while Russia has its own internal industry. Product and component shortages will be alleviated over time by increasing cooperation among these countries. Just as we are seeing between Russia and Mercosur and the cheese scenario. Collaborative surprises may well be in stor

Northern Sea Route Development Plan To 2035

Agenda cuts Europe Off From All Russian Arctic Resources And Concentrates On Asian Customers  

The Russian government has approved a new development plan for the Arctic Northern Sea Route (NSR) to be effective from now until 2035. And with about 1.8 trillion rubles (US$29 billion) allocated for the development of the NSR, according to the press service of the Russian Cabinet of Ministers.

The main goals of the plan are to ensure reliable and safe transportation of goods and goods for people living in the Russian Far North. As well as to create conditions for the implementation of investment projects in the Russian Arctic.

The plan includes more than 150 events: the construction of the Utrenny terminal for liquefied natural gas and gas condensate, the Bay Sever oil loading terminal, and the Yenisei coal terminal. In addition, it is also planned to build onshore and hydraulic structures to supply the Baimskoye field, create marine transshipment complexes for liquefied natural gas in the Kamchatka Territory and the Murmansk Region, and a hub port for organizing transit traffic in Vladivostok.

It is also planned to build a transport and logistics hub in the seaport of Korsakov on Sakhalin. Develop the Murmansk and Arkhangelsk transport hubs. And to build bunkering and maintenance bases in the Far Eastern ports of Tiksi and Dikson.

The Cabinet of Ministers also allocated part of the funds for the creation of ships of the icebreaker fleet (including the lead icebreaker of the Leader project), as well as the development of Arctic shipbuilding and ship repair production facilities. plans to improve the infrastructure of the Northern Sea Route in accordance with the Russian Maritime Doctrine, which was also approved last week.

The NSR is viewed as a main artery of the Russian Arctic. It has three main tasks, to:

  • Become an energy superhighway for export of hydrocarbons and other natural resources of the Russian Arctic;
  • Supply everything needed to the ports and new “points of economic growth” of the Arctic Zone of the Russian Federation (AZRF);
  • Assure smooth international transit.

The plan of practical measures to develop the NSR infrastructure up to 2035, also provides for:

  • Renovation of ports;
  • Building of SAR (search & rescue) and auxiliary fleet;
  • Expansion of navigational and hydrographic surveys;
  • Building new icebreakers;
  • Stimulating cargo shipments and international transit;
  • Boosting local energy supply, staff education, encouraging domestic shipbuilding and assuring environmental safety.

The development of the shortest sea route between the European, Western part of Russia and the Russian Far East will be able to reorient traffic flows to Asia. This will allow not only to intensify the transportation of energy carriers and cargoes, but also to develop the Arctic cruise tourism that is gaining momentum among Asian tourists. None of the new plans intend to provide Russian routes through to Europe, Canada, or the United States, effectively leaving the resources in the Russian Arctic for Asian customers. We provide Russian expert commentary on the plans as follows:

Association of Partners for Coordinating the Use of the Northern Sea Route

Vladimir Kharlov, vice president of the Association of Partners for Coordinating the Use of the Northern Sea Route, has stated “I outline the main directions that will remove obstacles to the effective development of the NSR, primarily its eastern part, which experts call an ‘infrastructural desert.’ This is where the main investments are needed. The cargo fleet operating on the NSR and nearby rivers is old, the development of the port infrastructure of the NSR requires serious reconstruction and modernization at the ports of Dikson and Tiksi. Among other areas that should reduce the risks of using the NSR to a minimum are the creation of a stable communication system, improving the safety of navigation and the emergency rescue system in the Arctic. There is a lot of work to be done: there is not much time left until 2035 to solve the main problems of the NSR”

Project Office for the Development of the Arctic

Nikolai Doronin, Chairman of the Board of the Project Office for the Development of the Arctic, has commented “Now the NSR operates only in an unbalanced mode, being mainly the export of products of large businesses and the northern delivery. For small and medium-sized businesses, the NSR is inconvenient due to the lack of a ’flat tariff’, meaning the cost of transportation for group cargo varies very much depending on the season. With the adoption of the NSR development plan, these problems will remain in the past. The main thing is that the government’s plan confirms the previously chosen course for the development of the Arctic zone, described in the development strategy of the Arctic Zone of the Russian Federation until 2035. A return to Arctic oblivion, as it was in the 1990’s, is not expected.”

Center for Arctic Studies at the Institute of Europe of the Russian Academy of Sciences

Diana Timoshenko, senior fellow at the Center for Arctic Studies at the Institute of Europe of the Russian Academy of Sciences, adds that, despite the fact that the transport industry has been actively developing over the past decade, there is no need to talk about the accelerated pace of operation of the NSR.

According to her estimates, a moderate, cautious, but directed development is expected in the near future. This is due to the lack of the necessary basic trading system for the transportation of goods, logistics and cargo turnover along the NSR, which could be relied upon to significantly increase these turnovers; there is also no single operator.

Timoshenko said “At the same time, the competitiveness of the system will also be determined by both effective planning and uninterrupted delivery, the introduction of control and support systems (including those based on Industry 4.0 technologies), ensuring the safety of cargo, and ease of use of the electronic trading platform for customers from Russia and abroad (foreign languages, ease of site navigation, security of electronic payments, and on. The new Maritime Doctrine, adopted on July 31, 2022, refers to the introduction of a Russian-only satellite communication and broadcasting system (named ‘Express-RV’) to create a single information space for supporting maritime activities. This will give a good incentive to operate the NSR and mark a new stage of development in the Arctic.”

Legal Issues    

Russian Senator Olga Epifanova has stated that it will be necessary to adopt a law on northern delivery using icebreaker ships along the Northern Sea Route. On the part of the population of the Arctic regions, there are many problems in this direction. The legal status of the NSR and the specifics of navigation along it are regulated not by a single, but by a whole range of regulatory legal acts.

Epifanova said that “Attempts to develop a single law on the NSR have been made repeatedly, but all of them were rejected for various reasons. However, in my opinion, the totality of public relations regarding the Northern Sea Route should be determined by a single document. It is necessary to legislatively emphasize the national status of the Northern Sea Route, its strategic importance. This is especially important today.”

Logistics Issues

Last year’s logistical crisis in Pevek, when several dozen ships stood in the Arctic ice, became a trigger for improving the management of the Northern Sea Route. Without a systematic approach, it will be difficult to achieve the goal of 80 million tons of cargo traffic along the Northern Sea Route in 2024.

“Today, one of the main problems in the development of the NSR is its small depth – up to 12.5 m on the route between the Arctic islands,” Elena Kudryashova, rector of the Lomonosov Northern (Arctic) Federal University (NAFU), has said. “Modern tankers and lighter carriers have a draft significantly exceeding 12 m. In this sense, the most problematic sections of the NSR are the Sannikov Strait and the area around the Bear Islands. At the same time, ships with a significant draft can use routes passing at higher latitudes north of the New Siberian Islands. However, from a navigational point of view, these routes have been little studied and require additional hydrographic studies.”

Navigational Issues

Alexander Makarov, director of the Arctic and Antarctic Institute, follows up by saying “With the increase in cargo traffic on the Northern Sea Route, the role of hydrometeorological support for safe and efficient navigation is noticeably increasing. Climate change in the Arctic is happening three times faster than anywhere else on the planet. But the feeling that warmer weather will make it easier for ships to navigate the Arctic seas is misleading. On the contrary, the situation is becoming less predictable, and the number of dangerous ice phenomena is increasing. For example, in contrast to previous years, the last two years for navigation in the Arctic seas have been quite difficult. In addition to safety, the importance of the efficiency of postings is growing – the same route can be passed by a ship with more and less energy consumption, and the final cost of cargo transportation depends on this.”

Increasing NSR Traffic Volumes

The planned volumes of cargo traffic along the NSR, previously agreed as attainable targets, also take into account the intensive development of Arctic deposits. It is expected that minerals will become the main base for the NSR. The international situation and the sanctions policy of Western countries against Russia make it necessary to increase trade with other regions, including Asian countries, meaning goods delivery will now use alternative routes. An increase in cargo traffic is inevitable, although it is still difficult to predict in specific numbers. The modern icebreaking and transport fleet under construction today only strengthens the case for increased volumes of traffic along the NSR.

Igor Pavlovsky, head of the Information and Analytical Center of the Project Office for the Development of the Arctic said that “An efficient transport corridor allows cargo to be transported without “adventures”: the danger of ice formation and ice escort. We must be aware that the Northern Sea Route will not be such a trade route in the near foreseeable future. The only thing that can allow it to compete with other major trade routes is the blocking of either the Strait of Malacca or the Suez Canal.” Neither is predicted yet, so the Northern Sea Route can be used to meet domestic Russian needs. The government’s order demonstrates this quite clearly. This is not expected to develop as an international transport corridor except maybe to the East.”

Cargo is growing at a rapid pace

Vera Smorchkova, professor of the Department of Labor and Social Policy, IGSU RANEPA, notices that the cargo turnover of the Northern Sea Route is growing at a rapid pace from year to year. If this trend continues, then some experts predict an excess of the planned volumes – 80 million tons by 2024. She said “The Northern Sea Route faces a number of difficulties, primarily seasonal, since most of the time of the year it is covered with ice. In this regard, active work is underway on the construction and use of icebreakers. Russia is actively assisted by China, which is also interested in the development of the NSR.”

Elena Egorycheva, from the Faculty of Economics of the RUDN University is more upbeat about the potential for a European strategy, saying that the NSR “Will allow Russia to transport our goods to Europe not through the Indian Ocean, but by the shortest, cheapest and safest route.”

Alternative Comparisons

Despite the huge difficulties concerning the development of the NSR, its development and efficiency remains valid, and it is becoming an important transport artery. Although during the USSR, the cargo turnover was a little more than 7 million tons, this has already been surpassed to reach 35 million tons. There will be further growth, primarily due to an increase in the transportation of energy resources. The NSR may well become the leading trade route in Russia. However, it remains relatively small in terms of comparisons – the Suez Canal cargo turnover in 2021 was about 2 billion tons. An updated plan come 2035 however may show greater potential once the existing new plan has been implemented.

This article was adapted from a piece published in Russian by the Izvestia newspaper. The original Russian version may be viewed here.